$1 Billion in Credit Assistance Now Available from EPA’s New Water Infrastructure Program

water treatmentOn January 10, 2017, the U.S. Environmental Protection Agency (EPA) announced the availability of $1 billion in credit assistance for water infrastructure projects under the new Water Infrastructure Finance and Innovation Act (WIFIA) program. See 82 Fed. Reg. 2933 (Jan. 10, 2017).  Congress enacted WIFIA in order to provide low-cost, long-term credit assistance through direct loans or loan guarantees. The program supplements other traditional forms of water infrastructure financing such as State Revolving Fund (SRF) programs and bonds.

Entities interested in applying for WIFIA funding must act fast. In order to be considered in the current round of funding, prospective borrowers must submit formal letters of interest to EPA no later than April 10, 2017. EPA will host informational webinars explaining the process of submitting and evaluating letters of interest on February 9 and March 7, 2017.

WIFIA Overview

  • Eligible Borrowers
    • Local, state, tribal, and federal government entities and instrumentalities
    • Partnerships and joint ventures
    • Corporations and trusts
    • State infrastructure financing authorities
  • Eligible Projects
    • Wastewater conveyance and treatment
    • Drinking water treatment and distribution
    • Enhanced energy efficiency projects at drinking water and wastewater facilities
    • Brackish or seawater desalination, aquifer recharge, alternative water supply, and water recycling
    • Drought prevention, reduction, or mitigation
    • Acquisition of property if it is integral to the project or will mitigate the environmental impact of a project
    • A combination of projects secured by a common security pledge or submitted under one application by an SRF program
  • Key Program Features
    • $20 million – Minimum project size for large communities
    • $5 million – Minimum project size for small communities (population of 25,000 or less); WIFIA requires EPA to set aside 15 percent of its budget authority for small communities.
    • 49 percent – Maximum portion of eligible project costs that WIFIA can fund
    • Total federal assistance may not exceed 80 percent of a project’s eligible costs
    • 35 years – Maximum final maturity date from substantial completion
    • Five years – Maximum time that repayment may be deferred after substantial completion of the project
    • Interest rate will be equal to or greater than the U.S. Treasury rate of a similar maturity at the date of closing
    • Projects must be creditworthy and have a dedicated source of revenue

Letters of Interest and Applications for Funding

Prospective borrowers must first submit a letter of interest to EPA by April 10, 2017. The primary purpose of the letter of interest is to: (i) validate the eligibility of the prospective borrower and the prospective project; (ii) perform a preliminary creditworthiness assessment; (iii) perform a preliminary engineering feasibility assessment; and (iv) evaluate the project against the selection criteria and identify which projects EPA will invite to submit applications.

EPA will invite selected prospective borrowers to submit an application based on preliminary engineering feasibility findings, a preliminary creditworthiness assessment, the amount of budget authority necessary to provide credit assistance, and the scoring of the eligibility criteria. EPA expects that it “will only invite projects to apply if it anticipates that those projects are able to obtain WIFIA credit assistance.”

Eligibility Criteria

EPA has identified the following project priorities, in addition to geographic and project diversity:

  • Adaptation to extreme weather and climate change including enhanced infrastructure resiliency, water recycling and reuse, and managed aquifer recovery;
  • Enhanced energy efficiency of treatment works, public water systems, and conveyance systems, including innovative, energy-efficient nutrient treatment;
  • Green infrastructure; and
  • Repair, rehabilitation, and replacement of infrastructure and conveyance systems.

Within the priorities, selection criteria (and relative weight) for this round of funding include:

  • National or regional significance with respect to the generation of economic and public health benefits – 10 percent
  • The likelihood that WIFIA assistance would enable the project to proceed at an earlier date than without – 5 percent
  • Use of new or innovative approaches (energy-efficient parts and systems, renewable or alternate sources of energy, green infrastructure and alternate sources of drinking water through desalination, aquifer recharge or water recycling) – 10 percent
  • Protection against extreme weather events, such as floods or hurricanes, as well as the impacts of climate change – 10 percent
  • Maintenance or protection of the environment or public health – 10 percent
  • Service of regions with significant energy exploration, development, or production areas – 5 percent
  • Service of regions with significant water resource challenges, including water quality concerns, significant flood risk, issues identified in existing regional, state, or multistate agreements, and water resources with exceptional recreational value or ecological importance – 10 percent
  • Responds to identified municipal, state, or regional priorities – 5 percent
  • Readiness of the project to proceed toward development, including a reasonable expectation that the construction of the project can commence no later than 90 days after the date on which a federal credit instrument is obligated – 5 percent
  • Inclusion of public or private financing in addition to assistance under WIFIA – 5 percent
  • Reduction of other federal assistance to the project – 5 percent
  • The needs for repair, rehabilitation, or replacement of a treatment works, community water system, or aging water distribution or wastewater collection system – 10 percent
  • Service to economically stressed communities, or pockets of economically stressed rate payers within otherwise non-stressed communities – 10 percent

Conclusion

Letters of interest must be submitted no later than April 10, 2017. Prospective borrowers should take action immediately to evaluate their potential WIFIA eligibility and to begin preparing a letter of interest. Developers, designers, program managers, and contractors may want to help identify eligible cities and projects.

 

Bart Kempf is a member of Bradley’s environmental and government relations teams.

Government Contractors a Continued DOJ Target for False Claims Act Enforcement in 2016

Government contract concept on missing puzzleThe federal government continues to use the False Claims Act (FCA) as one of its prime enforcement tools against banks and mortgage companies. As it does each year, Bradley has assembled an overview of the year’s major False Claims Act developments and opinions to keep you abreast of the status of law. You may find our 2016 Year in Review here.

Cybersecurity-Related Bid Protests: Feature Interview with Aron Beezley

Aron C. BeezleyBradley attorney Aron Beezley recently sat down with PubKLaw for a feature interview about significant 2016 legal developments regarding bid protests. Among other things, the feature contains a discussion of the rising prominence of cybersecurity-related bid protests, an analysis of the most noteworthy cybersecurity-related bid protest decisions from the past year, and forecasts about what 2017 will hold with respect to cybersecurity-related bid protests.

The complete interview, “ Cyber 2016 Year in Review with Aron Beezley of Bradley Arant Boult Cummings,” first appeared in PubKCyber on January 4, 2017. (login required))

If you have any questions about any of the topics discussed in the interview, please do not hesitate to contact Aron Beezley.

 

Obama Trumped? Top Five Trump Targets Among Obama’s Executive Orders

The White HouseThe election of Donald Trump will significantly affect companies that contract with the federal government. Trump’s business background and campaign promises suggest many upcoming changes in the way the federal government does business.

In his 1987 bestseller, Trump: The Art of the Deal, Trump wrote: “Deals are my art form. Other people paint beautifully on canvas or write poetry. I like making deals, preferably big deals.  That’s how I get my kicks.” Federal contractors should realize that the Trump administration will negotiate deals that differ from those of the Obama administration.

President Obama issued many executive orders and presidential memoranda that imposed new restrictions and requirements on government contractors. Trump has taken a dim view of Obama’s executive orders. Trump’s “Contract with the American Voter” outlines a 100-day action plan to “Make America Great Again.” In the contract, Trump states that he will “cancel every unconstitutional executive action, memorandum and order issued by President Obama.” Trump’s campaign website promised to “[c]ancel immediately all illegal and overreaching executive orders.”

Trump’s statements indicate that he will roll back regulations with the goal of reducing government expenses and encouraging job growth. His frequent use of Twitter also suggests that soon-to-be-President Trump may personally negotiate with government contractors to create better deals and reduce costs.

Given these statements, Trump will likely lift numerous restrictions on government contractors as part of an overall deal for the federal government to get more for less. We believe these Obama executive orders will be among the “First Five to Dive” under a Trump administration:

  1. Executive Order 13495: “Nondisplacement of Qualified Workers Under Service Contracts.” This was one of President Obama’s first executive orders, signed January 30, 2009. It requires a new federal contractor to offer jobs to workers employed by the outgoing contractor. It effectively gives the workers a right of first refusal to obtain jobs with the new contractor. Opponents say that this order limits the efficiency of new contractors.
  2. Executive Order 13502: “Use of Project Labor Agreements for Federal Construction Projects.” A project labor agreement (PLA) is a pre-hire collective bargaining agreement with a union that establishes the terms and conditions of employment for a construction project. President Obama signed this order on February 6, 2009, to require the use of PLAs on all federal construction projects valued at $25 million or more. Critics say that the order increases federal construction costs and limits the competitiveness of non-union contractors.
  3. Executive Order 13673: “Fair Pay and Safe Workplaces.” This order, signed by President Obama on July 31, 2014, requires prospective federal contractors to disclose labor law violations. Government officials are then required to consider a prospective contractor’s violation history when awarding contracts. The order also bars contractors from imposing pre-dispute arbitration agreements on their employees. Several companies sued to block implementation of this order, and on October 24, 2016, a federal district court in Texas sided with the employers against the Obama administration.
  4. Executive Order 13706: “Establishing Paid Sick Leave for Federal Contractors.” President Obama signed this order on September 7, 2015. It mandates that federal contractors allow employees at least one hour of paid sick leave for every 30 hours worked. The House Freedom Caucus has notified Trump’s transition team that this order needs to be rescinded. The Freedom Caucus also wants Trump to rescind Executive Order 13658, “Establishing a Minimum Wage for Contractors,” which sets a $10.10 minimum wage for the employees of federal contractors.
  5. Executive Order 13665: “Non-Retaliation for Disclosure of Compensation Information.” This order prohibits federal contractors from taking adverse employment actions against employees who disclose compensation information to other employees. President Obama signed the order on April 8, 2014. Critics of the order say that it increases government costs because salary transparency increases the employee expense of federal contractors.

Federal agencies have adopted rules implementing many of Obama’s executive orders, including those listed above. As a result, the rulemaking process will have to be used to eliminate these restrictions, and that process won’t be completed on “day one.”

In The Art of the Deal, Trump wrote: “The best thing you can do is deal from strength, and leverage is the biggest strength you have. Leverage is having something the other guy wants. Or better yet, needs. Or best of all, simply can’t do without.”

Trump is not one to voluntarily give up his leverage in a business deal. If federal contractors want or need the removal of government restrictions like those outlined above, Trump will likely expect something in return. Contractors can expect Trump to negotiate for lower prices, faster turn-arounds and better deliverables.

President Obama limited government outsourcing, but a Trump administration will likely increase outsourcing. In his contract with the American voter, Trump promised a hiring freeze on all federal employees except those in the military, public safety or public health, with the goal of reducing the federal workforce through attrition. At the same time, Trump has promised increased spending on defense, immigration enforcement, infrastructure, prison privatization, energy, law enforcement, cybersecurity and school choice. Companies in these industries will likely have many new opportunities to obtain government contracts. On the other hand, spending on environmental enforcement and education regulations will likely decrease, and companies in these industries may have fewer opportunities.

Federal contractors should also be on the look-out for new regulations on hiring former government contracting officers. In a recent television interview, Trump said that “the people that are making these deals for the government, they should never be allowed to go to work for these companies.”

Bradley has the experience to help companies strike good deals with the Trump administration and to take advantage of new government contracting rules that will be in the works.  Our Governmental Affairs Team is staffed with experienced professionals in national, state, and local legislative and executive branch processes, and is supported by lawyers from a number of our other practice groups. This multidisciplinary approach enables us to provide our clients with the broad range of experience and expertise needed to address their specific goals. Our governmental affairs practice encompasses a full range of services that are focused in two primary areas – advocacy and compliance. Our professionals provide advocacy services at the federal, state and local levels of government to both private and public entities. In addition to seeking to accomplish our clients’ advocacy goals, we help them to comply with the numerous lobbying, ethics, gift and campaign finance laws that govern these activities. If it all goes wrong, our Government Contracts Practice Group can help with a bid protest. If it all goes right, we can help with implementing the contract requirements by training your people on compliance and interpretation issues.

GAO Bid Protest Sustain Rate Nearly Doubles in FY 2016

Chart increaseThe Government Accountability Office (GAO) recently issued to Congress its annual bid protest report. Of particular note, the report states that, “[o]f the protests resolved on the merits during fiscal year 2016, [GAO] sustained over 22 percent of those protests.” By comparison, in fiscal year 2015, GAO sustained 12 percent of the protests resolved on the merits – a percentage that is in line with GAO’s historical protest “sustain rate” of approximately 10-12 percent. Thus, the percentage of “sustained” protests – i.e., protests in which the GAO found in favor of the protester on the merits – in fiscal year 2016 nearly doubled the percentage of protests sustained in fiscal year 2015, and nearly doubled GAO’s historical “sustain rate.”

In addition, protesters received some relief in 46 percent of the protests. GAO reports this  statistic as an “effectiveness rate” – i.e., the percentage of protests where the protester obtained “some form of relief from the agency” “either as a result of voluntary agency corrective action or in [GAO] sustaining the protest.” In fiscal year 2016, protesters thus received some form of relief from the agency in nearly half of the protests filed with GAO.

The report states that the “most prevalent reasons” for sustaining protests during the 2016 fiscal year were: (1) “unreasonable technical evaluation”; (2) “unreasonable past performance evaluation”; (3) “unreasonable cost or price evaluation”; and (4) “flawed selection decision.” In fiscal year 2015, by comparison, the “most prevalent reasons” for sustaining protests were: (1) “unreasonable cost or price evaluation”; (2) “unreasonable past performance evaluation”; (3) “failure to follow evaluation criteria”; (4) “inadequate documentation of the record”; and (5) “unreasonable technical evaluation.”

Here is a link to GAO’s fiscal year 2016 bid protest report. If you have any questions about GAO’s report or the bid protest process in general, please do not hesitate to contact the author of this article, who, along with his fellow lawyers at Bradley, handled more than 20 bid protests in 2016.

 

Bradley Partner David Pugh Elected 2017 Chair of the ABC Alabama Chapter Executive Committee

Bradley Partner David Pugh Elected 2017 Chair of the ABC Alabama Chapter Executive Committee

Bradley’s Construction Practice Group is pleased to announce that David Pugh will serve as the 2017 Chair of the Associated Builders and Contractors Alabama Chapter. ABC’s Nominating Committee and the general membership elected Mr. Pugh to the position based on his commitment to ABC’s mission, his background in construction and engineering, and his numerous positions of leadership within the organization, including service on the National Board as well as the Alabama Chapter Board.

“It is certainly unique to elect an attorney as chair of the Associated Builders and Contractors, but with David’s background and history with the Association, and his desire to better the construction industry, he was the clear choice this year,” said ABC President Jay Reed.

Mr. Pugh was formally introduced at the Excellence in Construction Banquet held on November 3.

Mr. Pugh is a civil engineer by degree, and worked in the field for a large construction firm before attending law school. As a member of Bradley’s Construction team, he represents owners, general contractors, subcontractors, engineers, architects, insurance companies and sureties throughout the United States at every stage of a construction project, from conception and planning to performance and closeout. He has drafted and negotiated contracts for numerous projects, large and small, he has assisted in contract administration during the construction of projects, and he has participated in trials, hearings, appellate arguments, mediations and arbitrations across the country and internationally.

Arbitration Clause Requiring Arbitrators to Render a Decision within 30 Days from Their Appointment? Superfast Decision?

Arbitration Clause Requiring Arbitrators to Render a Decision within 30 Days from Their Appointment? Superfast Decision?Ever wonder about a superfast arbitration procedure in a contract that you have been given? An arbitration clause requiring an arbitration panel to issue a decision within 30 days of being selected for the panel was recently challenged on a construction project in the Carolinas. Our firm was asked to provide assistance in handling a legal fee dispute (arising from a construction project in Colorado) requiring a panel to decide within 60 days of the initial notice of dispute.

If you are asked to advise about such a provision during contract negotiations, you should consider some or all of the following:

  1. Does your client routinely resolve large and small disputes arising during construction—some of them involving millions of dollars—within 30 to 60 days of its arising?
  2. If there is a formal hearing on the dispute, will it be difficult to complete evidentiary submissions and testimony with only a few days of trial?
  3. Will discovery be allowed in a proceeding and, if so, how can it be conducted in time to allow a hearing to be concluded and a decision rendered in 30 days?

If you agree to such a clause, then it may appear that your client and the other party believed there would be no discovery and only the most abbreviated of hearings. After all, courts routinely say that arbitration is a matter of contract, and the parties are free to enter into a contract of their crafting, which a court is to enforce. That may work for a change order dispute where the issue may involve millions of dollars, but it is limited to what is or is not shown on the plans and specifications. What if it involves a collapse of a floor of a building though? Or the cracking of a ramp in a parking garage?

If you are asked to advise a client long after the clause is included in a signed contract, what are your choices, assuming the owner invokes the clause (after having had weeks or months to gather his evidence) against your client? The answer is perhaps finally resident in due process, in that the clause is unenforceable because so fundamentally unfair. But before one girds oneself with the constitution, look first at the clause. Does it invoke the rules of any arbitral forum? One superfast clause has been viewed as enforceable because the Commercial Arbitration Rules of the American Arbitration Association (AAA), which the contract invoked, granted the arbitral panel the power to extend the 30-day time frame when the complexity of the case required it. For this reason, an agreement to arbitrate on a compressed schedule may not be found as unreasonable, nor as a violation of the parties’ due process rights.

What is the other line of attack? If the panel does not enter a decision in 30 days, does it lose jurisdiction such that the matter is either waived or no longer arbitrable? That challenge is, of course, available under the Federal Arbitration Act (FAA), but it is likely to be met by a court’s decision that the party raising the issue must first try the case to a conclusion, await the panel’s decision, and then attack it as a nullity because it was decided beyond the 30- day period. This attack may be particularly appealing if the superfast clause has no reference to the rules of any arbitration forum that might allow the panel to extend the deadline for good cause shown.

If you are inclined to write or review a possible clause, you might see this:

Any controversy or claim arising out of or relating to this Agreement shall . . . be settled by binding arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association . . . . The arbitration panel shall be required to render a decision within thirty (30) days after being notified of their selection . . . .

If you do, then consider whether your client is fostering, or being asked to agree to, a clause that simply will lead to fodder for lawyer battles later, presumably the precise result the client usually wants to avoid.

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Bradley Recognized as “National Tier 1” Law Firm for Construction Law

Bradley Recognized as “National Tier 1” Law Firm for Construction LawBradley’s Construction Practice Group is pleased to have been named a “National Tier 1” firm in Construction Law in the U.S. News – Best Lawyers® 2017 “Best Law Firms.” This marks the sixth consecutive year that Bradley’s Construction Practice Group has received this ranking. Additionally, Bradley earned “Best Law Firms” Tier 1 Metropolitan rankings in Construction Law in four offices: Birmingham, Jackson, Nashville and Washington, D.C.

“Best Law Firms” rankings are based on a rigorous evaluation process that includes both client and lawyer evaluations, peer review from leading attorneys in their fields, and review of additional information provided by law firms as part of the formal submission process. More than 10,000 attorneys submitted law firm assessments, and more than 10,000 clients provided 90,000+ evaluations for this year’s rankings.

Bradley also earned Tier 1 Metropolitan rankings across 60 additional practice areas and eight offices. More information about the firm’s 2017 rankings can be found here.

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D.C. Court of Appeals Decision Covers Important Contracting Principles

D.C. Court of Appeals Decision Covers Important Contracting PrinciplesThe D.C. Court of Appeals (the Court) recently issued a decision covering some important public construction contract principles, most notably notice, cost and pricing data requirements, and the implied duty of good faith and fair dealing.

The District of Columbia hired a contractor to perform work at the Fort Totten Solid Waste Transfer Facility. The contractor filed claims against the District, seeking compensation for delay costs and change orders. The District of Columbia Contract Appeals Board (CAB) ruled in favor of the contractor. The District appealed and the Court affirmed in part and reversed in part.

30-Day Notice Requirement: The Court noted that recent case law in the District of Columbia interpreting notice requirements in public construction contracts is scarce. The Court adopted the rule, well established by federal courts and federal contract appeals boards, that the notice requirements for claims should be liberally construed and only strictly enforced when the contractor’s failure to give timely notice prejudiced the government. The Court found that there was no prejudice to the District for the contractor’s failure to meet the technical notice requirement because the District was aware of the facts underlying the delay claims and continued to press forward with the contract. Thus, the contractor’s claims were not barred for failing to provide written notice of its claims within the 30-day window.

Cost & Pricing Data Requirements: The Court found that the District’s reliance on a contract provision, requiring the contractor to submit certified “cost or pricing data” before negotiating prices for additional work, was misplaced because the contractor did not bring the claims when costs were prospective. The contract allowed the contractor to submit records of actual costs post-performance when the parties could not reach an agreement on the costs prior to the performance of changed work. The Court also rejected the District’s argument that DC Procurement Rule, 27 DCMR § 1624, requires submission of certified “cost or pricing data” with contract claims.  Rather, it held that 27 DCMR § 3803.2 was the applicable provision, under which the contractor is required to submit “any data or other information in support of the claim.” The contractor submitted its actual cost breakdown, and thus its claims were not barred.

Duty of Good Faith and Fair Dealing: The Court ruled that in every contract there is an implied covenant of good faith and fair dealing applicable to each party and affirmed the CAB’s finding that the District had breached its implied duty of good faith and fair dealing by not fully cooperating with the contractor in obtaining a fire alarm permit. The District failed to respond to the contractor’s request for help and delayed in meeting with the Fire Marshall, which caused a significant delay in obtaining approval of the permit, thus entitling the contractor to damages.

The decision also addresses other important contract issues: the significance of a release in change orders, the implied warranty of design specifications, and the doctrine of patent ambiguity. Read the full decision here.

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Court Grants ABC’s Preliminary Injunction Request in Case Challenging “Blacklisting” Executive Order

Court Grants ABC’s Preliminary Injunction Request in Case Challenging “Blacklisting” Executive OrderWe recently reported on a lawsuit, filed by the Associated Builders and Contractors (ABC), challenging the “blacklisting” Executive Order and the implementing regulations. As we noted in our article, a ruling by the Court on ABC’s request for a preliminary injunction should be issued in short order, given that the effective date for the implementing rule is October 25, 2016.

Subsequent to the posting of our article, on October 24, 2016, the U.S. District Court in Beaumont, Texas granted in part ABC’s motion for a preliminary injunction. In particular, the Court held that ABC “satisfied all the prerequisites for the issuance of a preliminary injunction with respect to those portions of the Executive Order, FAR Rule, and DOL Guidance that impose new reporting requirements on federal contractors and subcontractors and restrict the availability of arbitration.” Accordingly, the Court “enjoined” the defendants from “implementing any portion of the FAR Rule or DOL Guidance relating to the new reporting and disclosure requirements regarding labor law violations as described in Executive Order 13673 and implemented in the FAR Rule and DOL Guidance.” Further, the Court “enjoined” the defendants “from enforcing the restriction on arbitration agreements.” Here’s is a link to the opinion.

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